Will a multi-car discount help you cut down your premium? Yes, this is true. But while this is true, you might actually have been fooled to pay a lot more even with the "discount." Let's get deeper into this...
You'll pay only $900 if a merchant gives you his $1,000 at a 10% discount. But what if another merchant has a display price of $800? In that case, you'd have lost $100 even though they do NOT offer you a discount.
If an insurer has very low rates for, say, an "A" car, that does NOT guarantee a low rate for your "B" car. There things to consider...
When working out your rate, insurance companies apply a number of factors in order to have enough to handle claims, take care of costs of doing business and making good profit. Ranking high among the many factors used in the underwriting process is a company's claims history. A simple definition for this is: Details of claims made within a particular period.
A company's experience with "A" car owners for a given year might be pleasant. But at the same time, they might have had far more claims than projected by policyholders who drive "B" cars. This insurer would be compelled to raise rates for one car while maintaining or even lowering rates for the other.
This means that your rate for an additional vehicle might be a lot more than what you would get with another insurer who did NOT have such an unfavorable experience with "B" owners. So while a multi-car discount is great, make sure you don't stand to gain more elsewhere before going for it.
Remember, a discount only means that they've removed a part of the amount they charge normally. It does NOT suggest that they are offering the best rate out there.
And, if you count in each of the many factors, you'll see why you need to shop before you buy: Each factor gets a different relevancy score from different insurers. This means a huge disparity in rates for comparable coverage types.
So, for those who have another car to insure, look around first. This will help you ensure that you'll really pay less with a multi-vehicle discount from your present insurer.
You'll pay only $900 if a merchant gives you his $1,000 at a 10% discount. But what if another merchant has a display price of $800? In that case, you'd have lost $100 even though they do NOT offer you a discount.
If an insurer has very low rates for, say, an "A" car, that does NOT guarantee a low rate for your "B" car. There things to consider...
When working out your rate, insurance companies apply a number of factors in order to have enough to handle claims, take care of costs of doing business and making good profit. Ranking high among the many factors used in the underwriting process is a company's claims history. A simple definition for this is: Details of claims made within a particular period.
A company's experience with "A" car owners for a given year might be pleasant. But at the same time, they might have had far more claims than projected by policyholders who drive "B" cars. This insurer would be compelled to raise rates for one car while maintaining or even lowering rates for the other.
This means that your rate for an additional vehicle might be a lot more than what you would get with another insurer who did NOT have such an unfavorable experience with "B" owners. So while a multi-car discount is great, make sure you don't stand to gain more elsewhere before going for it.
Remember, a discount only means that they've removed a part of the amount they charge normally. It does NOT suggest that they are offering the best rate out there.
And, if you count in each of the many factors, you'll see why you need to shop before you buy: Each factor gets a different relevancy score from different insurers. This means a huge disparity in rates for comparable coverage types.
So, for those who have another car to insure, look around first. This will help you ensure that you'll really pay less with a multi-vehicle discount from your present insurer.
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To learn more click here: Really Cheap Auto Insurance and Cheap California Auto Insurance. Chimezirim Odimba helps you pay less for more.
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